SBV demands stricter compliance over lending rates for priority sectors The Saigon Times Daily Bank tellers are seen working besides stacks of dollar and Vietnamese banknotes. SBV demands stricter control over lending rates for priority sectors – PHOTO: THANH HOA HCMC – The State Bank of Vietnam (SBV) has issued an official dispatch asking credit institutions and branches of foreign banks to strictly conform to regulations over the lending rates offered to enterprises in the priority sectors, reported news website Vietnamplus. Accordingly, credit institutions will need to control their credit growth in line with their capital mobilization capacity and credit growth targets announced earlier by SBV. The move is aimed at effectively applying interest rate and credit stability solutions and SBV’s regulations on lending rates for the priority sectors. Credit institutions should also focus on pumping capital into manufacturing activities; priority sectors such as agriculture, export and supporting industries; and small and medium enterprises and hi-tech firms. Banks must offer an annual interest rate not higher than 6.5% for eligible clients in the priority sectors that need short-term loans in Vietnam dong, as specified in the SBV Governor’s Decision No. 1425. In addition, credit institutions and foreign bank branches are required to tighten internal inspections to promptly detect violations on lending rate offerings and to impose strict punishments on the violators. SBV has also asked banks to reduce operational costs and improve business performance to be able to lower lending rates for the priority sectors as well as for production… [Read full story]